AB252: Bill Text

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2021 - 2022 LEGISLATURE

2021 Assembly BILL 252

April 8, 2021 - Introduced by Representatives Sortwell, Armstrong, Brooks, Edming, Kuglitsch, Murphy, Rozar, Skowronski, Tittl, Tusler and Thiesfeldt, cosponsored by Senators Feyen and L. Taylor. Referred to Committee on Ways and Means.

AB252,1,4 An Act to create 71.05 (6) (a) 30., 71.05 (6) (b) 55., 71.26 (2) (a) 13., 71.26 (2) (a) 14., 71.34 (1k) (q), 71.34 (1k) (r), 71.45 (2) (a) 24. and 71.45 (2) (a) 25. of the statutes; relating to: an income tax deduction for an arrearage paid on behalf of a tenant for municipal utility service.

Analysis by the Legislative Reference Bureau

Under current law, a municipal utility may collect arrearages for utility service provided to lots or parcels of real estate by providing, on October 15, a written notice to the owner or occupant of the amount owing and in arrears. If payment is not received by November 15, the arrearage amount and late penalties become a lien on the property that is collected as a tax on the property. Additional requirements apply to a municipal utility that provides water or electric service to a tenant in a rental dwelling unit. If the owner of the unit notifies the municipal utility that the tenant has assumed responsibility for payment for the service, the municipal utility must provide additional notices regarding past due amounts to both the tenant and the owner in order to collect the arrearages through a lien. Also, current law gives the municipality a lien on the assets of each tenant who is responsible for arrears in payments for the water or electric service. If the owner pays off the arrearage, the municipality's lien on the assets transfers to the owner. Under the bill, an owner who pays off an arrearage on behalf of a tenant may deduct that amount when calculating income for state tax purposes. However, if the tenant pays the owner for all or part of the arrearage in a subsequent taxable year, the owner must add that amount to the owner's taxable income for that year.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB252,1 Section 1. 71.05 (6) (a) 30. of the statutes is created to read:

AB252,2,4 71.05 (6) (a) 30. For taxable years beginning after December 31, 2020, the amount taken as a subtraction under par. (b) 55. by the owner of a rental dwelling that the owner receives from the tenant in a succeeding taxable year.

AB252,2 Section 2. 71.05 (6) (b) 55. of the statutes is created to read:

AB252,2,9 71.05 (6) (b) 55. For taxable years beginning after December 31, 2020, the amount of arrearage that the owner of a rental dwelling unit pays under s. 66.0809 (3m) (d) to a municipal utility for service provided to a tenant of the rental dwelling unit who is responsible for the payment of utility charges.

AB252,3 Section 3. 71.26 (2) (a) 13. of the statutes is created to read:

AB252,2,14 71.26 (2) (a) 13. For taxable years beginning after December 31, 2020, minus the amount of arrearage that the owner of a rental dwelling unit pays under s. 66.0809 (3m) (d) to a municipal utility for service provided to a tenant of the rental dwelling unit who is responsible for the payment of utility charges.

AB252,4 Section 4. 71.26 (2) (a) 14. of the statutes is created to read:

AB252,2,18 71.26 (2) (a) 14. For taxable years beginning after December 31, 2020, plus the amount taken as a subtraction under subd. 13. by the owner of a rental dwelling that the owner receives from the tenant in a succeeding taxable year.

AB252,5 Section 5. 71.34 (1k) (q) of the statutes is created to read:

AB252,3,3 71.34 (1k) (q) For taxable years beginning after December 31, 2020, a subtraction shall be made for the amount of arrearage that the owner of a rental dwelling unit pays under s. 66.0809 (3m) (d) to a municipal utility for service provided to a tenant of the rental dwelling unit who is responsible for the payment of utility charges.

AB252,6 Section 6. 71.34 (1k) (r) of the statutes is created to read:

AB252,3,8 71.34 (1k) (r) For taxable years beginning after December 31, 2020, an addition shall be made for the amount taken as a subtraction under par. (q) by the owner of a rental dwelling that the owner receives from the tenant in a succeeding taxable year.

AB252,7 Section 7. 71.45 (2) (a) 24. of the statutes is created to read:

AB252,3,14 71.45 (2) (a) 24. For taxable years beginning after December 31, 2020, by subtracting from federal taxable income the amount of arrearage that the owner of a rental dwelling unit pays under s. 66.0809 (3m) (d) to a municipal utility for service provided to a tenant of the rental dwelling unit who is responsible for the payment of utility charges.

AB252,8 Section 8. 71.45 (2) (a) 25. of the statutes is created to read:

AB252,3,19 71.45 (2) (a) 25. For taxable years beginning after December 31, 2020, by adding to federal taxable income the amount taken as a subtraction under subd. 24. by the owner of a rental dwelling that the owner receives from the tenant in a succeeding taxable year.

AB252,9 Section 9. Initial applicability.

AB252,3,22 (1) This act first applies to an arrearage paid by an owner of a rental dwelling unit under 66.0809 (3m) (d) on October 1, 2021.

AB252,3,23 (End)